Governor Mike DeWine’s Ohio Development Services Agency (DSA) operating budget proposal has clear winners and losers.  Fueled by a planned influx of federal funding and additional Ohio General Revenue Fund (GRF) funding, Governor DeWine’s proposed DSA operating budget proposes a 37% decrease from all funding sources for a total FY 2022 budget of $1.7B and dropping to $1.4B in FY 2023.  The big fiscal winners in the DeWine DSA budget are primarily focused on the Governor’s Investing in Ohio agenda focused on small business, broadband and small to mid-sized community infrastructure projects.  However, several successful DSA programs may have their funding cut substantially unless the General Assembly acts otherwise.

Ohio’s Manufacturing Education Partnership (MEP) helps Ohio’s small and medium-sized manufacturers to increase sales, create jobs and generate cost savings through technological innovation, workforce training and improved management practices. Small and medium-sized manufacturing companies are critical to Ohio, representing 90% of job growth for high-paying jobs. For every new manufacturing job that is created or retained, three to five supporting jobs are also created.  Managed by the Ohio Development Services Agency’s Office of Technology Investments, Ohio MEP is a State and Federal initiative sponsored by the U.S. Department of Commerce National Institute of Standards and Technology (NIST). To serve the diversity of Ohio’s industrial base, Ohio MEP manages a network of regional affiliate service organizations that are strategically selected and coordinated to serve as a statewide resource to meet the needs of key industry sectors and small manufacturers.   Governor DeWine’s proposed DSA budget recommends a substantial cut in MEP funding by suggesting it be reduced by 45% in FY 2022.

Finally, the Ohio DSA Rural Industrial Loan Program (RIPL) provides low-interest loans to assist eligible applicants with financing the development and improvement of industrial parks and related off-site public infrastructure improvements.  At least 50 percent of the outstanding loan balance will be forgiven upon successful completion of the project.  If the RIPL funds represent less than 50 percent of the total project costs, the percentage of loan forgiveness will be increased to an amount equal to 100 percent less the percentage of the project being funded by RIPL.  Eligible applicants include counties, municipalities, townships, non-profit organizations, port authorities, community improvement corporations, private developers, and other eligible applicants willing to develop eligible rural industrial park projects to improve the economic welfare of the people in the State of Ohio.  Eligible projects include the development and improvement of industrial parks in rural areas designed to attract and retain businesses related to manufacturing, distribution and warehousing, research and development, high technology, industry and commerce.  For this program, “industrial park” is defined as a site of 25 acres or more, zoned for or containing commercial or industrial users that is or will be adequately served by utilities and infrastructure.  Ohio companies may not relocate existing Ohio business operations to the industrial park without prior approval of the Development Director.  The proposed DeWine DSA budget suggests a substantial reduction in RIPL spending with a recommended 45% reduction. 

These DSA programs have a strong performance track record and opposition to the proposed cuts in the General Assembly is to be expected.  If you have questions about the proposed DSA agency budget, please email drobinson@montrosegroupllc.com